Term Insurance Plan: Defined benefits for defined period

Life Insurances 176 views

Buying a new insurance policy or life insurance term plan is your personal choice and decision. It is every essential to get yourself and your family secured financially. Term plan is a good investment tool to secure your family against any unforeseen and uncertain situation. It provides financial security to the insured's family in case of sudden death or any uncertain situation. You can buy  a term plan by paying the nominal charges. There are various banks and companies, which offer different term plans to meet your needs. LIC, Kotak , Aviva, Tata AIG,ICICI, HDFC and many other financial institutions offer these term plans to people. Though LIC is the first choice of maximum people who want to buy any policy or term plan.

What is a term insurance plan?

Term insurance plan is a kind of life insurance cover. This term plan offers coverage for defined period of time. You can buy a term plan according to your financial goals and liabilities. You can buy a term plan for 10 years, 15 years, 20 years or for maximum 30 years. If the insured expires during the term of policy then death benefits is payable to nominee. These plans are specifically designed to secure the family of the insured person in case of sudden death or uncertainty. This plan offers a specific amount of coverage for a defined period of time.

Lowest premiums: Term insurance are the least expensive policies. The premiums for term insurance policies are the lowest among all other types of life insurance policies. You are required to pay the minimum premiums against the term plan you have bought as there is no investment component and the entire premium goes for covering the risk. In case, if the policy holder expired during the insured term, the death benefits is paid to the nominee. However, the policy do not provide any survival or maturity benefits once the policy term expires. There may be some plans that offer to return the premiums paid by the policy holder if he survives.

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Ways to select the best term plan: Choosing the right term plan is really important. You should select the right term plan as per your needs. You should always research about various plans and compare them on different parameters before buying it. Here are some important factors, which you should consider while buying the term plan:

  • Reputation of the company
  • Cover you need
  • Check the claim settlement ratio
  • Factors of inflation in paying the premium and coverage benefits
  • Compare the terms and conditions of various insurance companies
  • Compare two different plans from two different companies
  • Consider the term plan on duration before buying it
  • Check the terms and condition related to the long-term
  • You can buy for an online or offline term plan

Compare the different premiums: The premium in the term plan could vary from company to company. The premium also depends upon the tenure of the policy. If the tenure of the policy increases, the premium for the same sum assured increases.

Eligibility criteria for the term insurance plan: The eligibility criteria for term insurance plan varies from insurance company to company and even from plan to plan. The minimum age to buy the plan or entry is 18 years and the maximum age limit is up to 65 years.